The National Asset Management Agency has approved a business plan for Bovale Developments.
According to an auditor’s report, Bovale Developments incurred losses in the year to the end of June 2011. This followed losses in the year to the end of June 2010, but the extent of the losses is not known as Bovale Developments, controlled by Michael and & Tom Bailey, is unlimited.
However, a three-page report by the firm’s auditors, McGrath & Co, confirms the liabilities of the company — established in 1983 — exceeded its assets on June 30 last.
The losses are in contrast to the last publicly-known profits recorded by Bovale Developments in 2004/03.
The last filed accounts prior to re-registering as an unlimited company show that over those two years the two Bailey brothers shared remuneration of €19.7m — or €9.8m each — making them the then biggest salary earners in the state. The firm recorded pre-tax profits of €69m in 2003.
In 2006, the Roscommon natives made a record €22.17m tax settlement with the Revenue Commissioners.
Now the firm’s auditors state that arising from the approval by Nama of the firm’s business plan, the directors, Michael and Tom Bailey, “are confident of continuing support for the foreseeable future”.
McGrath & Co highlight the valuation put by Bovale Developments on its property assets.
The auditors state the financial statements by Bovale Developments draw attention to the risks and uncertainties associated with the valuation of property assets, particularly under current market conditions.
The auditor’s report states: “The current economic difficulties being experienced in Ireland have resulted in significantly reduced numbers of property transactions. The resulting lack of comparable evidence for market value has decreased the degree of certainty in valuations, as compared to those in a more stable market with a normal level of activity.
“The values ultimately realised from property assets could be materially different from their balance sheet carrying amounts. Nonetheless, the board of directors has considered the valuation of each of the significant property assets reflected in the financial statements as at June 30, 2011, on the basis of advice from external professional qualified valuers and has adjusted the carrying value of property assets.
“The directors have prepared the financial statements on a going concern basis. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.”
The company did not return a call for comment.
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